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Canada-UAE Tax Treaty - Residency

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Canada-UAE Tax Treaty - Residency

Old 16th Nov 2008, 12:15
  #1 (permalink)  
Thread Starter
Join Date: Jun 2005
Location: land o' the free
Posts: 16
Canada-UAE Tax Treaty - Residency

Hearing some nasty rumour that under the Tax Treaty we can only be considered a resident of UAE if we are a UAE national. Therefore, the Canada Revenue Agency considers us residents of Canada for tax purposes.

Anyone have more info on this?
SimCity is offline  
Old 16th Nov 2008, 19:49
  #2 (permalink)  
Join Date: May 2003
Location: CYYZ
Posts: 272
If you cut your ties with Canada, then you are a non-resident.

No house, No bank account, no car, no drivers lic., no wife living there.

Then you do not answer to Revenue Canada anymore.

There are several places that can advise you as too obtaining
a non-resident status for your perticular situation.
Obbie is offline  
Old 17th Nov 2008, 18:04
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Join Date: Aug 2005
Location: Somehwere on the planet
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Doesn't matter if you are a UAE national or not..they key is you are a non resident of Canada. once that has been established you are not liable for tax on income earned overseas.
tbaylx is offline  
Old 17th Nov 2008, 20:38
  #4 (permalink)  
Join Date: Apr 2005
Location: Asia
Posts: 5
Obbie and tbaylx are correct
fill the form and read on this web site

Leaving Canada (emigrants)

Jettt_Settt is offline  
Old 24th Nov 2008, 13:01
  #5 (permalink)  
Join Date: Jan 2001
Location: 런던
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How Revenue Canada knows?

Anybody knows how Revenus Canada know we are working & paid outside of Canada?
chk5511 is offline  
Old 24th Nov 2008, 20:30
  #6 (permalink)  
Join Date: Aug 2005
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They don't unless thr country has a tax treaty with canada. However if you stop filing tax returns in canada they will be a bit annoyed/suspicious. I would think you would want them to know you are no longer living in canada to avoid paying the tax?
I suspect that if they take an interest in you it would be pretty easy to check with customs to see when and how often you were leaving canada.
Canada has a pretty good expat friendly tax system...better to play within the rules imho than try and cheat it and get busted for thousands in back taxes and penalty's.
tbaylx is offline  
Old 25th Nov 2008, 18:30
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Join Date: Jun 2000
Location: Canada
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If you are deemed non-resident for tax purposes by the Canada Revenue Agency today, they will tell you that's 'today'. Tomorrow is another matter as tax law changes. So might your tax status, so be careful. They will also tell you having a letter stating that you are non-resident for tax purposes doesn't go much beyond the day it was written or issued.
Your tax status will most probably be assessed upon your return.
Like the gentleman said, cut all your ties with Canada. The safest bet here.
(I'd stay away from Cdn banks for off-shore banking btw, as Ottawa has tight control and cnx via the BOC to check records) If you're with RBC in DXB you might want to reconsider things.

The gen decs you complete when you scoot in and out of the country also tell them how many days you've been in-country so, be careful of the 180 rule.

There is a story circulating about a Cdn Dr. who worked in the Gulf for 15 years. Shortly after his re-patriation to Canada, the CRA did their assessment and apparently, the Dr's wife had maintained her B.C. driver's licence and a Sears card for the entire time they were out of the country.
Since you can't maintain a Cdn Driver's licence without a Cdn residential address, they were deemed residents of Canada for tax purposes and he was assessed 15 years back taxes. (ouch!!)
You see, we're taxed on worldwide income. Even if it hurts.

Be careful out there and don't take my advise. Seek a professional Canadian financial advisor working the ME and Gulf circuit who's versed in Cdn tax law.

If you think Canada has friendly tax laws for expats, you're dreaming in colour.
Willie Everlearn is offline  
Old 25th Nov 2008, 20:53
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Join Date: Aug 1998
Location: Blandings
Posts: 682
There is no "180" rule...

... if your wife returns to Canada today and you personally never visit the country on a single occasion for 15 years, you are liable for full Canadian tax on your offshore income for the entire 15 years. The primary determinant for your country of residence is the location of your family. Wife and/or family in Canada? You are resident of Canada regardless of the location of your physical body.

There is no problem with having a Canadian bank account. Your sole responsibility is to advise the bank that you are non-resident and it then becomes their responsibility to collect with-holding tax on the interest. It is not your problem nor are you required to even declare this income to CCRA.

It is no problem having a Canadian brokerage account in Toronto, much less RBC Offshore. Your responsibility is to tell them you are non-resident. Their responsibility is yada yada per above. Capital gains and government bond yields are tax-free to you but interest and dividend income is taxed at a nominal rate, somewhere around 25%.

PS There are a number of people in Dubai who are dicing with disaster per paragraph one. Let's hope they don't tick anyone off who has a taste for revenge. A single call to CCRA would be life-changing in every way for someone who thought he was being clever.

Last edited by Dropp the Pilot; 25th Nov 2008 at 21:10. Reason: accuracy
Dropp the Pilot is offline  
Old 26th Nov 2008, 03:17
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Join Date: May 2008
Location: 37000
Posts: 15
Agree with Dropp's advise with minor clarification.

All interest income is tax free for non-residents as of the last budget. Tax treaty reduces dividend withholding to 15% if you are resident of UAE. Payouts from Canadian Income Trusts are withheld at 25%.

Just make sure you have no "major" ties and no more than one or two "minor" ties.
Tube Rider is offline  

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